Posted on 03/03/2019 8:27:30 PM PST by GuavaCheesePuff
Nearly 11 million Americans nationwide would have been capped from deducting more than $323 billion in state and local taxes in 2017 because of changes enacted in the GOP's tax reform legislation, according to an audit released Tuesday by the Treasury Inspector General for Tax Administration — and expect similar results for the 2018 tax year.
The 28-page report offers a new window into the full scope of the $10,000 cap on SALT deductions, which is supported by the White House and top congressional Republicans but has been heavily criticized by the leaders of many high-tax Democratic states, including New York, and by elected officials on Long Island. The cap went into effect in the 2018 tax year.
The audit, which relies on federal tax returns, estimates that if the SALT limits had been in place in 2017, 10.8 million tax filers would have lost a combined $323 billion in deductions. Auditors estimate similar results in tax year 2018, where more than 10 million taxpayers will be unable to fully deduct their state and local taxes, the report said.
(Excerpt) Read more at newsday.com ...
And they dwell in high tax States and make enough to itemize.....fancy that.
Or:
"Millions of Americans Paying More Taxes to the Federal Government to Pay For the Corporate Tax Rate Being Slashed from 35% to 21%."
One of the problems with property taxes is the deductions they give for those of social security age. As that demographic baby boomer group grows faster than the following generations, the required revenue depends on a decreasing tax base.
Not to pester but...
You don’t mention the benefit you got from the effect of the tax change on your stocks, etc.
I guess a lot of people just look at their tax bill though!
NJ here, went from $16,000 to $14,000 federal refund this year (I know, I know, never got around to changing witholdings, always seems to get forgotten about after February) with an average $75-$100 more in the paycheck each week, my “crumbs”. Seems to have worked out better, property taxes aren’t terrible for the state at $6,500 and now we’re 18 years into a 30 year mortgage and the interest payment is less. Standard deduction worked out better than itemized.
Well stated, and I wonder if these majority blue staters and media will whine near as loudly when the fed income tax goes to 70%, but hey maybe the payroll deductions will keep pace and you will get that all important “refund”, doesn’t seem to matter what you actually paid, but what you get back in April. Fools.
Should be zero...same as the personal income tax.
Thanks for the replies all.
The impression I get is that those heavily invested in their homes ( a conservative investment- it’s what I did but in a low SALT state) and not in the market suffered.
Those with low mortgages generally didn’t.
Hadn’t considered the effect of the change in AMT and fees.
Most interesting is that no one considers the benefit of the change on their portfolio’s stock values in their calculations, only the change it made in their tax bill!
I guess that’s just the way people are though.
The stock portfolio change while a salient point, is less obvious to most people. The immediate and much more obvious hit to one’s bottom line is probably why people look there and exclude the other variables in the equation.
The $24,000 standard deduction helped me a little but I’m still paying more because I have two children that were 17 or older last year and the elimination of personal exemption raised my taxable income by more than $20,000.
The part that irritates me is when fools spout off nonsense about how they are SUBSIDIZING these states.
It just goes to show you how effective Ryan’s propaganda was.
Just about every state with high SALT ALSO pays more to the Feds than they receive in payment from the Feds of any type.
And those states that are such good stewards of their taxpayer funds? Nearly every one of them a parasite, dependent upon the blue states for their economic survival.
Yet these idiots think they’re subsidizing me. Because they are stupid.
How so
“It is deductible” is what people hear and do accordingly. I do taxes and explained that the std deduction was greater than the itemized and told them to pay off their mortgage. When the property taxes were “deductible” they didn’t mind paying them.
NOW they are not as “deductible” so people are very aware and will respond with blame and change in behavior.
By the way, interest, taxes and charity are all part of the itemized on schedule A. so yes, it is all related...………………...
Military bases tend to be located in red states.
Also, retirees tend to relocate to red states, so Social Security and Medicare $$ shift to red states.
How many people living in red states have retired to blue states? The converse is true, in part because of the weather, and in part because of the high taxes and cost of living in blue states.
(Conversely, my wife, a retired blue-state social worker, tells me she had clients who moved from red states to blue states because program benefits are much better in blue states.)
I'm one, so I'll give you a little background. I'm now partially retired, after working for the last 57 years, and paying income and Social Security taxes the whole time. I worked my way through college, and had, and have, a good job working for corporations. The reason I'm affected by this is that I own two houses. I have actually built three houses, each with my own hands. While working and raising a family, I also built my own homes, one for year 'round living, and another a 'cabin', though it was capable of full time living. For this, we lived paycheck to paycheck for most of our lives. This was not because we were poor, it was because there was always a major project needed for the houses, for which we had no mortgages.
We're no longer living paycheck to paycheck, but we own two homes. This makes our real estate taxes higher than the SALT limit.
I'm not complaining. Because of the higher deductions, though, our actual tax bill is less than last year.
But all should BEWARE. Just because your tax bill this year may not reach the SALT limit IT SOON WILL. There is no inflation adjustment. Just as the AMT was targeted for only 400 people when it was implemented, it soon hit millions. The SALT limit is exactly the same. Every 'tax cut' since President Kennedy's in the 60s had the short term benefit of reducing middle class taxes. However, they had the long term effect of eliminating taxes from lowest paid workers, and moving more middle class tax payers into the higher tax brackets through inflation. Now, half the workers in the US pay no taxes, and the middle and upper paid workers pay it all. This gets progressively worse as each 'tax cut' is passed. I guess that's why the Democrats call themselves 'Progressives". Those paying no taxes vote for them, and they always put progressively more workers in the no tax bracket making the rest of us pay more.
Who calls State And Local TAXES - “SALT?” Is that something an accountant would say to pseudo-impress a client?
Finally..... they are paying their fair share
No biggie, Democrat people of New York all say that we need higher taxes, they should be tickled pink.
10.8 million tax filers would have lost a combined $323 billion in deductions.
Now what is this? focusing on a small negative , not the NET effect. You are being lied to.
In return we got lower tax rates, a higher standard deductible and a bunch of other things.
We also got a free market system in place where itemized deductions are not going to influence our behavior as much. Liberals charity is going to be reduced, high tax states are in the news, Big houses and high mortgages?
Folks, not a perfect system, there are winners and losers but in the LONG TERM, I like it.
The biggest reason is a BIG Government that requires higher and higher taxes to feed the monster. Cut government by 20%, eliminate the DB pensions, right size the current pensions being paid out to state employees, cut state taxes by 50% cut local taxes by 50% reform schools and cut school taxes by 50%.
“Right now it’s hidden. They never see that money, so they can’t miss it.” .........As a former low-end taxpayer, I can say honestly that we certainly DID miss it, altho we never saw the money except on our pay stubs. We missed it every time we came up a few dollars short just before payday, or coming up short on being able to buy something we needed, etc., etc. It was very much missed when we realized that the money confiscated by the government would have maybe made the difference between having a retirement fund or NOT having one.
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